SLB and ADNOC Drilling Partner for Unconventional Oil and Gas Development

Rhea-AI Summary

SLB (NYSE: SLB) has announced a joint venture agreement with ADNOC Drilling Company and Patterson-UTI to create Turnwell Industries OPC. This partnership aims to accelerate the UAE's unconventional oil and gas program, with an initial target of completing 144 wells by the end of 2025. The joint venture will leverage AI, smart drilling design, completions engineering, and production solutions.

SLB will provide integrated drilling, stimulation, and completion services, along with project management, digital capabilities, and subsurface support. ADNOC Drilling will hold a 55% majority stake, SLB a 30% stake, and Patterson-UTI the remaining 15%. The partnership is expected to elevate the performance of UAE's unconventional energy assets in a safe and sustainable manner.

Positive

• Joint venture formation with ADNOC Drilling and Patterson-UTI to accelerate UAE's unconventional oil and gas program
• Initial scope of 144 wells to be completed by Q4 2025, with potential for additional wells in the second phase
• SLB to provide integrated drilling, stimulation, and completion services, as well as project management and digital capabilities
• SLB holds a 30% equity stake in the joint venture

Negative

• None.

Insights

Energy Industry Analyst

This partnership between SLB, ADNOC Drilling and Patterson-UTI marks a significant development in the UAE's unconventional oil and gas sector. The joint venture, Turnwell Industries, aims to accelerate the development of 144 unconventional wells by Q4 2025, with potential for further expansion.

Key points to consider:

• SLB's 30% equity stake in the JV positions it to benefit from the UAE's growing unconventional energy market.
• The venture leverages SLB's expertise in integrated drilling services, stimulation, completions and digital capabilities.
• This partnership aligns with the UAE's strategy to enhance domestic energy production and reduce reliance on imports.
• The use of AI and smart drilling design could lead to improved efficiency and cost-effectiveness in unconventional resource extraction.

For investors, this deal represents a strategic move by SLB to strengthen its position in the Middle East market and diversify its revenue streams. The long-term potential of this partnership could be substantial, especially if the initial phase proves successful and leads to additional well developments.

Financial Analyst

This joint venture represents a strategic move for SLB with potentially significant financial implications:

• Market Expansion: SLB gains a foothold in the UAE's growing unconventional energy sector, diversifying its geographic revenue base.
• Revenue Potential: With 144 wells planned by 2025 and prospects for more, this could generate a steady, long-term revenue stream for SLB.
• Technology Monetization: The JV allows SLB to monetize its advanced drilling technologies and digital solutions in a high-potential market.
• Risk Mitigation: By partnering with ADNOC Drilling (55% stake) and Patterson-UTI (15% stake), SLB shares both the investment risk and potential rewards.

While specific financial projections aren't provided, the scale of the project and SLB's 30% stake suggest this could be a material contributor to future earnings. Investors should monitor the progress of the initial 144-well program and any announcements regarding expansion, as these will be key indicators of the venture's success and potential impact on SLB's financials.

Agreement will accelerate the initial scope of 144 unconventional wells for delivery by Q4 2025 with potential for significant number of additional wells in the second phase

ABU DHABI, United Arab Emirates--(BUSINESS WIRE)-- SLB (NYSE: SLB) today announced an agreement to create Turnwell Industries LLC OPC (Turnwell), a joint venture (JV) with ADNOC Drilling Company, SLB and Patterson-UTI. The JV will allow the three companies to leverage leading innovations in AI, smart drilling design, completions engineering and production solutions.

The JV will focus on the acceleration of UAE’s unconventional oil and gas program, with an initial 144 wells scheduled for completion by the end of 2025. SLB will provide integrated drilling, stimulation and completion services, as well as project management, digital capabilities and subsurface support as part of the venture. ADNOC Drilling through its wholly owned subsidiary ADH RSC LTD will hold a 55% majority equity stake, SLB a 30% equity stake and Patterson-UTI the remaining 15% equity stake.

"We are proud to join forces with ADNOC Drilling in this strategic partnership that demonstrates SLB’s leading position in the region deploying innovative digital, drilling and completion technologies in developing unconventional energy resources,” said Tarek Rizk, SLB’s president for the Middle East and North Africa region. ”UAE’s unconventional energy assets hold a promising future, and we are very much looking forward to elevating their performance in a safe and sustainable way.”

“Today marks a defining moment for Turnwell and our key partners SLB, and Patterson UTI. The acceleration of the well program is a testament to the innovation, collaboration and pursuit of excellence that will define our joint venture,” said Abdulrahman Abdulla Al Seiari, chief executive officer, ADNOC Drilling. “Turnwell will not only unlock the immense potential of the UAE's world-class unconventional energy resources but will also set new benchmarks for the global energy industry. We are proud to lead the way in responsibly shaping the future of energy, both in the UAE and beyond."

About SLB

SLB (NYSE: SLB) is a global technology company that drives energy innovation for a balanced planet. With a global footprint in more than 100 countries and employees representing almost twice as many nationalities, we work each day on innovating oil and gas, delivering digital at scale, decarbonizing industries, and developing and scaling new energy systems that accelerate the energy transition. Find out more at slb.com.

About ADNOC Drilling

ADNOC Drilling, listed on the Abu Dhabi Securities Exchange (ADX symbol “ADNOCDRILL”; ISIN AEA007301012), is the largest drilling and integrated drilling services (IDS) company in the Middle East by fleet size, owning and operating one of the largest multi-discipline drilling fleets in the world. The Company is a critical link in ADNOC’s upstream business, as ADNOC responsibly accelerates its production capacity targets in light of globally increasing demand for energy. ADNOC Drilling incorporated IDS into its portfolio in 2018 and now offers a total solution of start-to-finish wells and associated services. To find out more, visit: www.adnocdrilling.ae.

Cautionary Statement Regarding Forward-Looking Statements:

This press release contains “forward-looking statements” within the meaning of the U.S. federal securities laws — that is, statements about the future, not about past events. Such statements often contain words such as “expect,” “may,” “can,” “estimate,” “intend,” “anticipate,” “will,” “potential,” “projected" and other similar words. Forward-looking statements address matters that are, to varying degrees, uncertain, such as forecasts or expectations regarding the deployment of, or anticipated benefits of, SLB’s new technologies and partnerships; statements about goals, plans and projections with respect to sustainability and environmental matters; forecasts or expectations regarding energy transition and global climate change; and improvements in operating procedures and technology. These statements are subject to risks and uncertainties, including, but not limited to, the inability to achieve net-negative carbon emissions goals; the inability to recognize intended benefits of SLB’s strategies, initiatives or partnerships; legislative and regulatory initiatives addressing environmental concerns, including initiatives addressing the impact of global climate change; the timing or receipt of regulatory approvals and permits; and other risks and uncertainties detailed in SLB’s most recent Forms 10-K, 10-Q and 8-K filed with or furnished to the U.S. Securities and Exchange Commission. If one or more of these or other risks or uncertainties materialize (or the consequences of such a development changes), or should underlying assumptions prove incorrect, actual outcomes may vary materially from those reflected in our forward-looking statements. The forward-looking statements speak only as of the date of this press release, and SLB disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240927013902/en/

Media

Josh Byerly – Vice President of Communications

Moira Duff – Director of External Communication

Tel: +1 (713) 375-3407

Email: media@slb.com

Investors

James McDonald – Senior Vice President of Investor Relations

Joy V. Domingo – Director of Investor Relations

Tel:+1 (713) 375-3535

Email: investor-relations@slb.com

Source: SLB

FAQ

What is the name of the joint venture between SLB, ADNOC Drilling, and Patterson-UTI?

The joint venture is called Turnwell Industries OPC.

How many wells are initially planned for completion by Q4 2025 in the SLB (NYSE: SLB) joint venture?

The initial scope includes 144 unconventional wells to be completed by the end of 2025.

What is SLB's (NYSE: SLB) equity stake in the Turnwell Industries joint venture?

SLB holds a 30% equity stake in the Turnwell Industries joint venture.

What services will SLB (NYSE: SLB) provide in the Turnwell Industries joint venture?

SLB will provide integrated drilling, stimulation, and completion services, as well as project management, digital capabilities, and subsurface support.